Obama claims the “wealth of this country was built on the backs of slaves.”February 25, 2021
Let’s take a look at what others have written about the relationship between the American economy and slavery.
The American economy was caught in transition on the eve of the Civil War. What had been an almost purely agricultural economy in 1800 was in the first stages of an industrial revolution which would result in the United States becoming one of the world’s leading industrial powers by 1900. But the beginnings of the industrial revolution in the prewar years was almost exclusively limited to the regions north of the Mason-Dixon line, leaving much of the South far behind.
In 1860, the South was still predominantly agricultural, highly dependent upon the sale of staples to a world market. By 1815, cotton was the most valuable export in the United States; by 1840, it was worth more than all other exports combined. But while the southern states produced two-thirds of the world’s supply of cotton, the South had little manufacturing capability, about 29 percent of the railroad tracks, and only 13 percent of the nation’s banks. The South did experiment with using slave labor in manufacturing, but for the most part it was well satisfied with its agricultural economy.
Free states attracted the vast majority of the waves of European immigration through the mid-19th century. Fully seven-eighths of foreign immigrants settled in free states. As a consequence, the population of the states that stayed in the Union was approximately 23 million as compared to a population of 9 million in the states of the Confederacy.
As the war progressed, substantial and far-reaching changes were taking place far from the battle lines. When Lincoln became president in March 1861, he faced a divided nation, but also a Congress dominated by Republicans after many Southern Democratic members left to join the Confederacy. Lincoln and congressional Republicans seized this opportunity to enact several pieces of legislation that had languished in Congress for years due to strong Southern opposition. Many of these bills set the course for the United States to emerge by war’s end as a nation with enormous economic potential and poised for a massive and rapid westward expansion. When Southerners left Congress, the war actually provided the North with an opportunity southerners from Congress, the war actually provided the North with an opportunity to establish and dominate America’s industrial and economic future.
…the United States of America would be a very different nation today than had the war never been fought. If we are truly the world’s last remaining superpower, then it is, at least partially, the massive industrial and economic expansion enabled by the Civil War that allowed us to ascend to that role in the first place.
The Cotton Gin, the Western Frontier, and the Early American Economy, by Mike Moffatt, Ph.D.
Cotton, at first a small-scale crop in the American South, boomed following Eli Whitney’s invention of the cotton gin in 1793, the machine that separated raw cotton from the seeds and other waste. The production of the crop for use had historically relied on arduous manual separation, but this machine revolutionized the industry and in turn, the local economy that eventually came to rely on it. Planters in the South bought land from small farmers who frequently moved farther west. Soon, large southern plantations supported by labor stolen from enslaved African people made some American families very wealthy.
Early Americans Move West
It wasn’t just small southern farmers who were moving west. Whole villages in the eastern colonies sometimes uprooted and established new settlements looking for new opportunity in the more fertile farmland of the Midwest. While western settlers are often depicted as fiercely independent and strongly opposed to any kind of government control or interference, these first settlers actually received quite a bit of government support, both directly and indirectly. For example, the American government began investing in infrastructure out west including government-funded national roads and waterways, such as the Cumberland Pike (1818) and the Erie Canal (1825). These government projects ultimately helped new settlers migrate west and later helped move their western farm produce to market in the eastern states.
New inventions and capital investment led to the creation of new industries and economic growth. As transportation improved, new markets continuously opened to take advantage. The steamboat made river traffic faster and cheaper, but the development of railroads had an even greater effect, opening up vast stretches of new territory for development. Like canals and roads, railroads received large amounts of government assistance in their early building years in the form of land grants. But unlike other forms of transportation, railroads also attracted a good deal of domestic and European private investment.
a combination of vision and foreign investment, combined with the discovery of gold and a major commitment of America’s public and private wealth, enabled the nation to develop a large-scale railroad system, establishing the base for the country’s industrialization and expansion into the west.
Mike Moffatt, Ph.D., is an economist and professor. He teaches at the Richard Ivey School of Business and serves as a research fellow at the Lawrence National Centre for Policy and Management.
If the Confederacy had been a separate nation, it would have ranked as the fourth richest in the world at the start of the Civil War. The slave economy had been very good to American prosperity. By the start of the war, the South was producing 75 percent of the world’s cotton and creating more millionaires per capita in the Mississippi River valley than anywhere in the nation. Enslaved workers represented Southern planters’ most significant investment—and the bulk of their wealth.
Slavery, Wealth and the Confederacy
By the start of the 19th century, slavery and cotton had become essential to the continued growth of America’s economy. However, by 1820, political and economic pressure on the South placed a wedge between the North and South. The Abolitionist movement, which called for an elimination of the institution of slavery, gained influence in Congress. Tariff taxes were passed to help Northern businesses fend off foreign competition but hurt Southern consumers. By the 1850s, many Southerners believed a peaceful secession from the Union was the only path forward.
When considering leaving the Union, Southerners knew the North had an overwhelming advantage over the South in population, industrial output and wealth. Yet, the booming cotton economy most Southerners were optimistic about their future. As one state after another left the Union in 1860 and 1861, many Southerners believed they were doing the right thing to preserve their independence and their property.
The following article from Bloomberg | Quint argues that the existence of slavery and the cotton economy of the South “played a relatively small role in the long-term growth of the U.S. economy. The economics of slavery were probably detrimental to the rise of U.S. manufacturing and almost certainly toxic to the economy of the South. In short: The U.S. succeeded in spite of slavery, not because of it.”
Bloomberg | Quint: How Slavery Hurt the U.S. Economy, by Karl W. Smith.
…there is no doubt that slavery made many Southern plantation owners rich and propelled the U.S. cotton industry. In 1795, the year after the invention of the cotton gin, the U.S. produced 8 million pounds of cotton. Widespread adoption of the gin raised that to 40 million pounds by 1801. From there, production increases came from the reallocation of slaves to cotton plantations; production surpassed 315 million pounds in 1826 and reached 2.24 billion by 1860.
Nevertheless, the total effect of this boom on the U.S. economy was modest. In 1860, on the eve of the Civil War, cotton production represented just 5% of the U.S. economy. Crucially, relatively little — just 13% in 1830 — was used in the domestic textile industry. Virtually all the rest was exported to Great Britain.
Slave labor was no match for canals, railroads, steel mills and shipyards. Slavery — and the parochial rent-seeking culture it promoted — inhibited the growth of capitalism in the South. Ultimately, it was Northern industrial might that ended that peculiar institution in the U.S. once and for all.
Karl W. Smith is a Bloomberg Opinion columnist. He was formerly vice president for federal policy at the Tax Foundation and assistant professor of economics at the University of North Carolina. He is also co-founder of the economics blog Modeled Behavior.
Another compelling argument dispelling Mr. Obama’s myth about the contribution of slavery to the American economy is found at Reason.com, where the author concludes, “We need to stop using the history of slavery to bolster anti-capitalist ideology. Ingenuity, not exploitation by slavery or imperialism or finance, is the story of the modern world.”
Deirdre McCloskey writes, “Slavery Did Not Make America Rich.”
The rise of capitalism depended, the King Cottoners claim, on the making of cotton cloth in Manchester, England, and Manchester, New Hampshire. The raw cotton, they say, could come only from the South. The growing of cotton, in turn, is said to have depended on slavery. The conclusion—just as our good friends on the left have been saying all these years—is that capitalism was conceived in sin, the sin of slavery.
Yet each step in the logic of the King Cotton historians is mistaken. The enrichment of the modern world did not depend on cotton textiles. Cotton mills, true, were pioneers of some industrial techniques, techniques applied to wool and linen as well. And many other techniques, in iron making and engineering and mining and farming, had nothing to do with cotton. Britain in 1790 and the U.S. in 1860 were not nation-sized cotton mills.
Growing cotton, further, unlike sugar or rice, never required slavery. By 1870, freedmen and whites produced as much cotton as the South produced in the slave time of 1860. Cotton was not a slave crop in India or in southwest China, where it was grown in bulk anciently. And many whites in the South grew it, too, before the war and after. That slaves produced cotton does not imply that they were essential or causal in the production.
Deirdre McCloskey is a contributing editor at Reason. She is emerita professor of economics, history, English, and communication at the University of Illinois at Chicago.
Similar arguments are provided in this article at American Thinker, but one new consideration is examined … where the wealth of the South was focused.
Did Slavery Create American Prosperity? By Doug Petrikat
While it is true that a small elite group in the South did become wealthy from growing cotton through the use of slave labor, we also need to take into account the impact this had on the U.S. economy as a whole. At the outbreak of the Civil War the Confederate States of the South had a population of 9 million as opposed to 23 million in the Union. The overwhelming majority of people in the South were poor farmers who did not own slaves. The 4.9% of Southerners who did own slaves had most of them working on plantations to produce cotton, which was the South’s biggest cash crop. Almost all was sold to the British market. Cotton made up 59% of exports from the U.S. at the outbreak of the Civil War, but in 1860 cotton production represented just 5% of the U.S. economy. It is also worth noting that in the years after the war cotton production increased dramatically without the use of slave labor.
✅ Slavery Did Not Make America Richer | Vincent Geloso
✅ The US Economy Would Have Been Stronger Had the US Never Had Slavery | George Reisman
✅ No, Slavery Did Not Make America Rich | Corey Iacono